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  Chapter Nine:
 
MONEY
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  Average Earnings
  Minority Earnings
  Average Incomes
  Personal Consumption
  Philanthropic Donations
  Personal Debt
  Income Distribution
  Poverty
  Inflation
  

 

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MONEY

Poverty

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Poverty decreased significantly from 1959, when official measurements began, until 1973, when it increased moderately and remained at a slightly elevated level during the subsequent two decades. Between 1993 and 1999, however, the incidence of poverty declined by more than a fifth.
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The federal government’s poverty threshold is determined by calculating the annual cost of a basic list of groceries for a reference family of four (two adults and two children) and then multiplying that number by three. Families whose annual incomes are less than this amount are considered “below the poverty line.” The amount of income is adjusted for the number and ages of the people living in the household, along with other factors. The chart shows the proportion of the population living in households that were below the poverty line. 

In the United States, the incidence of poverty was related to race and ethnicity, location, family composition, age, and education. The incidence of poverty was more than twice as high among blacks and Hispanics than among whites. The central districts of metropolitan cities had the most poverty. The suburbs of the same cities had the least, while small towns and rural areas had poverty rates that fell between those of the inner cities and their suburbs. Far fewer married than unmarried people were poor. People living alone were more likely to be poor than people in families, and women were more likely to be poor than men. Children and young adults aged eighteen to twenty-four were more likely to be poor than any other age group. People who did not complete high school were more likely to be poor than those who attended college. These effects were cumulative so that, for example, a black unmarried mother under age twenty-four was likely to be poor, while a married white college graduate between the ages of forty-five and fifty-four was almost certain not to be. 

In 1999, the incidence of poverty fell to its lowest level in two decades. It declined among every racial and ethnic group, falling to a record low among blacks and matching historic lows among Hispanics. The poverty rate was the lowest since 1979 among children, and the lowest on record for Americans aged sixty-five and older. The incidence of poverty fell to record lows for married-couple families as well as families headed by women with no husband present. Much of this significant decline in poverty occurred among residents of central cities. 

Poverty, as defined by the government’s monthly income threshold, was a permanent or semi-permanent condition for some Americans, but a transient experience for many others. During 1993 and 1994, the latest years for which these data are available, 30 percent of the population was poor for at least two consecutive months. However, only 5 percent of the population was poor for the entire twenty-four months. 

The government’s measure of poverty is simple but rather crude. Its most basic flaw is the measure of income, rather than expenditure or standard of living. Households “below the poverty line” actually spend considerably more money than they take in: they draw down assets, borrow money, and avail themselves of nonincome benefits such as food stamps and Medicaid.


Chapter 9 chart 8

Source Notes
Source Abbreviations

Joseph Dalaker and Bernadette D. Proctor, “Poverty in the United States 1999,” Current Population Reports P60-210 (2000). See also SA 1998, tables 756–766. For the individual duration in poverty, see Mary Naifeh, “Dynamics of Economic Well-Being, Poverty, 1993–94: Trap Door? Revolving Door? Or Both?” Current Population Reports P70-63 (1998).

 

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